>> Workforce Training: Fail or flourish? >>
Why do some workforce training efforts fail, while others flourish? Are we wasting our resources? Find what works and what doesn’t with research-validated solutions.
Adaptiva Corp Research Team
Background: In challenging times, workforce training is an essential component for economic recovery, diversification, and advancement of the labor market, particularly for unemployed (or underemployed) job seekers. The disparities caused by pandemics, wars, and hurricanes, are particularly felt by workers of color and those with less formal education, who experience significant declines in employment. These groups are overrepresented in industries like service, agriculture, transportation, retail, leisure & hospitality, which are hit hard by reduced in-person activities, declining economic activity spread across the economy, or when the prices for goods and services are rising, and subsequently, eroding purchasing power.
During distressing times, many individuals in affected industries need to face change, and the transitions are facilitated by workforce training programs. More than 20 percent of workers in sectors such as leisure and hospitality, service, agricultural, transportation, wholesale, and retail reported being in a different sector within three months. This indicates high mobility in the workforce where reskilling and upskilling programs are likely to play a pivotal role.
When the programs perform well, the return on investment (ROI) for workforce training, particularly in soft skills, can be substantial. A study by the MIT Sloan School of Management found that a 12-month workforce training program focused on soft skills delivered a 250% ROI within eight months of completion, primarily through increased productivity. Upskilling and reskilling have also been identified as the top priority for nearly 60% of leadership and development professionals, with a strong focus on these areas expected to contribute to better business outcomes, improved bottom lines, and a future-proofed workforce.
In the context of labor statistics, it's challenging to pinpoint the exact ROI of workforce training due to the dynamic nature of the labor market and various contributing factors. However, it's evident that workforce training has a positive impact on company culture, loyalty, productivity, and retention, and is becoming increasingly necessary as the skills required in the labor market evolve. For instance, The World Economic Forum estimates that 50% of all employees will need reskilling in the next five years, and employers are expected to offer reskilling and upskilling to more than 70% of their employees by 2025. Moreover, a significant percentage of business leaders expect to see a return on their investment in upskilling and reskilling within a year.
To optimize the ROI, it’s recommended that organizations align their HR and Learning and development teams with business objectives and automate their upskilling and reskilling efforts where possible. Such alignment ensures that training efforts directly contribute to strategic priorities and the core business, which can then be measured using business-aligned metrics.
Why do some workforce training efforts fail, while others flourish? Research-validated solutions
Workforce training efforts can fail for several reasons, but research-validated solutions offer guidance on creating successful programs:
Lack of Alignment with Business Goals: Training that is not aligned with an organization's strategic objectives is likely to fail. Programs must support the company's goals.
Lack of Engagement: Training must be engaging, interactive, and tailored to the learners' needs. Techniques like AI personalized training, gamification, social learning, and microlearning can help make training more engaging.
Lack of Relevance and Practical Application: Training should be relevant to the learners' job roles and responsibilities and provide practical skills that can be directly applied to their work.
Lack of Follow-up and Reinforcement: Without opportunities to practice and apply new skills, learners may quickly forget what they have learned. Ongoing support and reinforcement are crucial.
Lack of Measurable Outcomes: Training programs need clear goals and a plan to measure their impact. Without this, it's difficult to demonstrate their value.
Flourishing programs often involve direct engagement with employers and industry partners to ensure relevance and practical application, tailoring training to the specific community and job market needs, and drawing from evidence-based practices that have shown success in matching workers to jobs and raising earnings.
How do we know if we are wasting our workforce training efforts?
Determining if workforce training efforts are being wasted involves evaluating several key indicators. Here are some ways to assess the effectiveness of your training programs:
Lack of Clear Objectives: Training should have specific, measurable objectives. If you can’t define what success looks like, you can’t measure it.
No Improvement in Performance: If employees are not improving in their roles or the specific skills the training is targeting, it's a sign that the training may not be effective.
Low Engagement Levels: During and after training, if employees show low engagement or lack of interest, this could indicate that the training content is not resonating with them.
Feedback and Surveys: Soliciting feedback can reveal if employees find the training useful. Negative feedback or suggestions for improvement can signal that changes are needed.
Return on Investment (ROI): Calculate the ROI by measuring the performance improvements and impact on business results against the cost of the training. A low ROI indicates that the training may not be cost-effective.
Retention and Application of Knowledge: If employees are not retaining or applying the knowledge and skills from training to their work, this could signify a waste of resources.
Alignment with Business Goals: Training should be aligned with the overall business strategy and goals. If it's not, it might not contribute to the desired outcomes.
Lack of Follow-Up: Without reinforcement or follow-up, employees may not integrate what they’ve learned into their work habits.
Outdated Content: If the training material is outdated and not keeping up with industry or technological changes, it won’t be useful.
High Dropout Rates: A high rate of employees not completing the training could indicate that it’s not engaging or seen as valuable.
Monitoring these indicators, gathering data, and regularly reviewing the training program's impact are crucial steps in ensuring that workforce training is a valuable investment rather than a waste of effort.
The effectiveness of workforce training efforts in the USA has varied, with some programs showing significant success while others have been less effective. Successful workforce development programs often have a few key characteristics:
Evidence-Backed Approaches: Programs that are backed by solid evidence and research tend to be more effective. Funding should be directed to these types of programs, as they have been identified as particularly successful in getting Americans into work or back to work at higher wages.
Employer Engagement: Training programs that engage directly with employers and industry partners tend to be more effective. These partnerships help ensure that the training provided is relevant to available jobs and meets industry needs, which is essential for long-term labor market success.
Sector-Specific Training: Sectoral training programs that link education and training directly with the needs of the labor market can be effective, especially for disadvantaged workers. These programs provide skills that are in demand by employers, improving job quality and raising wages for participants.
Support for Displaced Workers: Policies aimed at reducing earnings losses through retraining have been proposed, which include establishing a Displaced Worker Training program that provides longer-term training and aligns closely with labor-market needs1.
Despite these successes, some training programs have struggled to adapt to the changing economy and have not successfully addressed the issues faced by workers. There is no one-size-fits-all solution, and training may not always be appropriate. It must be tailored to fit the specific needs of the community and the available jobs.
In conclusion, workforce training in the USA can be highly effective when it incorporates evidence-based practices, engages with employers, focuses on sector-specific needs, and supports displaced workers with targeted training programs. However, there's still room for improvement in ensuring all programs are adapted to the changing economy and tailored to the needs of the workforce.
References
Brookings. (n.d.). Building America’s Job Skills with Effective Workforce Programs: A Training Strategy to Raise Wages and Increase Work Opportunities. Retrieved from https://www.brookings.edu
Federal Reserve Bank of Chicago. (2022). Monetary Policy, Inflation Outlook, and Recession Probabilities. Retrieved from https://www.chicagofed.org
TLS Learning. (n.d.). Why Training Programs Fail: Top Reasons and How to Overcome Them. Retrieved from https://www.tlslearning.com